Sebi Amends LODR To Determine Market-cap
Based on market capitalisation, the Top 100 to 250 corporations will be impacted by the modification. For the remaining enterprises, the framework remains optional
In order to update the process for determining the market capitalisation of listed firms under the LODR Regulations, the Securities and Exchange Board of India (Sebi) updated its Listing Obligations and Disclosure Regulations (LODR) Regulations, 2015 on 17 May 2024, with the Sebi (LODR) (Amendment) 2024.
Sebi will use 'average market capitalisation' for a certain period, instead of using a market cap for a single day (which was previously determined on 31 March).
The amendment affected ten provisions in the LODR Regulations viz. 3, 15, 17, 21, 25, 26A, 29, 30, 34, 43A, 44.
The amendments came after Sebi appointed an expert committee under the leadership of Santosh Kumar (SK) Mohanty, a former full-time member to promote ease of doing business.
Based on market capitalisation, the Top 100 to 250 corporations will be impacted by the modification. For the remaining enterprises, the framework remained optional.
Notably, amendments to regulations will take effect from 31 December 2024 and the ranking for compliance will now be based on the average market capitalisation from 01 July to 31 December, while 31 December will serve as the cut-off date.
There is a three-month transition period (or until the beginning of the following fiscal year, whichever is later) following the ranking determination on 31 December before the applicable LODR regulations take effect.
